LONDON - British watchdog the Competition and Markets Authority (CMA) has opened a preliminary investigation into Viagogo’s planned $4 billion acquisition of StubHub over fears that it may lessen competition in the live and ticketing industry.
The CMA has given interested parties until Jan. 10, 2020 to comment on the merger, after which it will make a decision on whether to begin a formal phase 1 inquiry.
The CMA is an independent non-ministerial government department that has the jurisdiction to examine mergers, including acquisitions and joint ventures, where two or more companies cease to be distinct.
Its rules dictate that in order to open a formal investigation, either the U.K. turnover of the acquired business needs to exceed £70 million ($93 million), or the two enterprises supply or acquire at least 25% of the same goods or services supplied in the U.K. and any merger would increase that share of supply.
According to financial records filed at Companies House, StubHub UK Limited’s turnover was £12.9 million ($171. Million) in 2018, resulting in a profit of £850,000 ($1.1 million) before taxation. Viagogo, which is based in Switzerland, has not filed any financial records in the U.K. and its earnings are not a matter of public record.
CMA investigators will be paying particular attention to how a Viagogo-StubHub would transform the secondary ticketing market in the U.K.
Unlike in North America, Viagogo and StubHub are the only two major "for profit" secondary ticket platforms still operating in Britain after Ticketmaster shuttered its two resale sites, GetMeIn and Seatwave, in late 2018 and replaced them with a fan-to-fan ticket exchange.